RUTH MILLER, United States Magistrate Judge.
Before the Court is defendant Dowson Holding Company, Inc.'s Amended Motion for Sanctions (Dismissal with Prejudice) (ECF 133).
On January 19, 2006, Monique Faulkner ("Faulkner") and Blair Shannon ("Shannon")
After discovery and motion practice in this case, on January 28, 2010, the Bankruptcy Court overseeing Faulkner's bankruptcy entered an Order approving a settlement reached by defendants and the trustee of Faulkner's bankruptcy estate. Notwithstanding the settlement, on March 5, 2010, Dowson filed the instant motion for sanctions. Thereafter, on April 12, 2010, this Court entered an Order (ECF 139) acknowledging the settlement and denying all pending motions without prejudice, subject to the submission of a stipulation to dismiss pursuant to the settlement. Defendant Dowson sought reconsideration of that Order so that the Court could consider the pending motion for sanctions. On March 22, 2011, the Court vacated the April 12, 2010 Order insofar as it denied the current sanctions motion, thus clearing the way for consideration of the instant motion.
In support of the request for Section 1927 sanctions, Dowson alleges generally that"Plaintiffs
(ECF 133, at p. 2 (footnote omitted)) Dowson also notes that it moved to disqualify plaintiffs' attorneys because of their involvement with the investigator Sheraw, but that motion was denied.
Further, Dowson contends that after it filed for summary judgment on a legal issue in the case (the foreseeability of the shooting of Shannon), "plaintiffs" sought, and were granted, "numerous continuances based on Rule 56(f)
Finally, Dowson claims that counsel "have engaged in a course of intimidation of [Dowson's] representatives and non-parties, including but not limited to Lester Shannon, and made numerous unrestrained personal attacks in depositions and pleadings filed with the Court." (ECF 133, at p. 11)
After a review of the law applicable to Section 1927, each of these alleged bases for imposing Section 1927 sanctions will be discussed in turn.
28 U.S.C. § 1927 provides as follows:
28 U.S.C. § 1927. The statute is aimed at addressing acts by attorneys that unreasonably extend court proceedings. Zuk v. Eastern Pa. Psychiatric Inst., 103 F.3d 294, 297 (3d Cir.1996) ("Although a trial court has broad discretion in managing litigation before it, the principal purpose of imposing sanctions under 28 U.S.C. § 1927 is the deterrence of intentional and unnecessary delay in the proceedings."). The statute does not apply to acts that occurred prior to the filing of a lawsuit, such as a "failure to make a reasonable inquiry into the facts and law before filing," nor does it authorize imposing sanctions on a client. Zuk, 103 F.3d at 297.
Moreover, Section 1927 sanctions require a finding of willful bad faith, not merely a showing of objectively unreasonable conduct. Baker v. Cerberus, Ltd., 764 F.2d 204, 208-09 (3d Cir.1985) ("conduct must be of an egregious nature, stamped by bad faith that is violative of recognized standards in the conduct of litigation"). See also Grider v. Keystone Health Plan Central, Inc., 580 F.3d 119, 142 (3d Cir. 2009) ("sanctions may not be imposed under § 1927 absent a finding that counsel's conduct resulted from bad faith, rather than misunderstanding, bad judgment, or well-intentioned zeal;" quoting LaSalle National Bank v. First Connecticut Holding Group, L.L.C. XXIII, 287 F.3d 279 (3d Cir.2002)).
Sanctions under Section 1927 are appropriate for attorneys who engage in "serious and studied disregard for the orderly process of justice;" Ford v. Temple Hosp., 790 F.2d 342, 347 (3d Cir.1986); and not simply those who bring weak cases:
Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421-22, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978).
In cases where courts have granted Section 1927 sanctions, bad faith is usually apparent and egregious. For example, in Administrator-Benefits for the ExxonMobil
2009 WL 5204482, at *1, 2009 U.S. Dist. LEXIS 120213, at *3 (D.V.I. Dec. 22, 2009). Similarly serious conduct was at issue in Griffith v. Hess Oil V.I. Corp., 5 F.Supp.2d 336 (D.Vi.1998), where the Court imposed Section 1927 sanctions for significantly aberrant behavior. In that case, the Court found that "conscious and deliberate effort by an attorney of the bar of this Court to withhold highly relevant case authority from the Court would constitute bad faith." Id. at 340.
Ultimately,"[i]n order to award attorneys' fees under 28 U.S.C. § 1927, a court must find that an attorney has (1) multiplied proceedings; (2) in an unreasonable and vexatious manner; (3) thereby increasing the cost of the proceedings; and (4) doing so in bad faith or by intentional misconduct." Toy v. Plumbers & Pipefitters Local Union No. 74 Pension Plan, 317 Fed.Appx. 169, 172 (3d Cir. 2009).
Dowson first contends that plaintiff's counsel's contacts with investigator Sheraw were wrongful and should have led to counsel's disqualification. Those allegations were dealt with in detail in Magistrate Judge Barnard's Memorandum and Order dated July 2, 2009, 2009 WL 2026327, that denied the motion to disqualify (ECF 81). Although Dowson disagreed with the result and appealed the Order to the District Court, that appeal was resolved by the District Court's April 12, 2010 Order. Plaintiff's counsel opposed the motion to disqualify and it was decided in their favor. These circumstances do not constitute an unreasonable or vexatious multiplication of proceedings, and do not warrant sanction under Section 1927.
Second, Dowson raises complaints related to the personal representative of Blair Shannon's estate, who allegedly "did not authorize this lawsuit." This complaint relates only to the case involving claims brought by Christine Hamilton as the purported personal representative of the Shannon estate in Civil No. 08-cv-02, and has no bearing on Faulkner's direct claims brought in the instant case. These circumstances likewise do not give rise to Section 1927 sanctions.
Next, Dowson contends that plaintiff Faulkner (and by extension her attorneys) committed fraud on this Court because she initiated a lawsuit in which she "lacked standing" due to the prior pendency of her bankruptcy, and because she failed to disclose her instant claims as an asset in the
Dowson's fourth argument in support of its request for sanctions is based on plaintiff seeking "numerous continuances" under Federal Rule of Civil Procedure 56 to take additional discovery for the purpose of responding to Dowson's summary judgment motion. The record reflects that the several Rule 56(f) motions were filed in response to Dowson's July 2009 motion for summary judgment in the Hamilton case (Civil No. 2008-02), however, and not in this case. Although Dowson did eventually file a summary judgment motion in this case in December 2009,
Fifth, Dowson makes allegations regarding the scheduling and rescheduling of depositions, referring to an "Exhibit H (deposition transcript)" to the motion, which purportedly contains evidence of such conduct. No Exhibit H appears to have been filed with this motion, or thereafter. Thus, apart from counsel's somewhat convoluted description of events as contained on pages 8 and 9, the record is devoid of competent evidence supporting an award of Section 1927 sanctions based on the deposition scheduling.
Finally, somewhat as an afterthought, Dowson claims that counsel "engaged in a course of intimidation," and made "numerous unrestrained personal attacks in depositions and pleadings filed with the Court." (ECF 133, at p. 11) Once again, however, Dowson does not cite to any competent evidence of such conduct, and the Court is thus left with nothing more than counsel's bare representation that such conduct occurred. Section 1927 sanctions will not be awarded on that basis.
Accordingly, for the foregoing reasons, it is hereby
ORDERED that the motion for sanctions under 28 U.S.C. § 1927 is DENIED.